Trademark Bidding on Google

Google’s opening up trademarked keywords for bidding is one more piece of power shifted away from corporations and toward consumers. I imagine corporations will waste little time heading to court to protect their property. In the long run, I doubt the corporations will come out on top.

Trademark Economics

Let’s first look at why Google wants to do this. Mainly, it’s opening up a potentially enormous market for itself, of course. A significant number of searches include brand names. Google previously excluded these, for the most part, from open bidding. Brand name search generally connotes purchase intent. That makes them particularly valuable searches.

Determining the exact amount of revenue involved is difficult, but I imagine a sizable portion of Google’s 150,000-plus advertisers could come up with a few trademarked terms for their keyword lists. Google, like any business, must first look to its current customers for growth, always easier to achieve than new acquisition.

Search is an opportunity for value creation. Google must create as many of those opportunities as possible. If there are a sizable number of searches for trademarked words, a big slice of the pie remains on the table.

Yeah, But Can They Do That?

It would appear so. I’m no lawyer, but here’s my take:

The big precedent is the Netscape/Playboy case. Although the two parties had settled, a federal court decided to allow the case to go to trial, saying in essence it had merit. In that case, Playboy was offended by Excite’s “keying” practice for banners. Searches on “playboy” produced a banner with an image of a naked woman, not supplied by Playboy. Clicks on the banner went to a page not owned by Playboy. The consumer could well assume the ad was for Playboy, given the search and results.

Playboy would have prevailed because Excite allowed an advertiser to use the trademark outside the boundaries of fair use, into the realm of deception. To prevent a similar situation, Google need only police against deception. This would be easier than it would be for Excite, as Google ads are text-only.

A legislative safety net, the Millennium Copyright Act, supports this position. Although trademarks and copyrights are different things, the Act leads you to believe Google’s decision is OK, but the search engine must be vigilant.

Essentially, Google must ensure no deception occurs. If users are deceived, Google must immediately remove the offending ads. If it doesn’t, it becomes liable. Google does this anyhow, to ensure relevance.

Trademarks as Fair Use

I’ve written before about use of trademarked names. Branding seeks to own a concept and attach a name to it. In our brand-saturated world, names can become shortcuts for product categories. “U-Haul” means “low-cost, do-it-yourself moving.” Of consumers searching on “U-Haul,” some want to find a van to rent, and some specifically want a U-Haul van. Those focused on the brand will ignore competitive offers. The rest are up for grabs. A problem creeps in only if they’re attracted by deception.

This is the core of the power shift away from corporations and toward consumers. If Google does a good policing job, consumers ultimately will have more power. They’ll find competitive deals, better prices, and more options. It blurs the whole sales cycle we’ve held so dear for so long: awareness –> consideration –> trial –> purchase –> repeat. Consideration, in particular, is at risk.

What Corporations Need to Do

Brand owners must find ways to increase the strength of their marketing, particularly in areas such as search. That’s where consumers are increasingly headed and where competitive threats are on the rise.

Actions are fairly limited, now that the option of petitioning Google to prevent others from bidding on your trademark is gone. The best practices are what’s been the basis of good search engine marketing (SEM).

First, buy your own name. You want to be somewhat near the top. Second, don’t use paid listings to avoid good, old-fashioned search engine optimization (SEO). Regardless of what’s going on in the paid section, ensure your site and brand show up very high in the natural, algorithmic section of the search.

Many Thanks…

As I said, I’m not a lawyer. I’m indebted to Martin Schwimmer, Esq., for his help with this column. Any errors in interpretation are wholly mine. Check out Martin’s blog for informed discussions about this and many more issues.

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